Report Suggests Banning Anti-competitive Hospital Contracts Could Lower Healthcare Costs
A recent report from the White House Council of Economic Advisers, released on Thursday, highlights how banning certain anti-competitive practices among hospitals could contribute to a reduction in healthcare expenses across the United States.
The report indicates that eliminating these non-competitive agreements might lead to a decrease in hospital and affiliated physician prices by 18%, with estimates varying from 11% to 26%. This could lower the average cost of an inpatient stay to around $4,100. Additionally, in markets directly affected by this ban, researchers project that premiums paid by employers could drop by 6.5%, leading to savings of about $1,755 annually per family and $606 per individual.
Mechanisms like “anti-steering,” “anti-tiering,” and “all-or-nothing” contracts are cited as methods employed by dominant hospital systems to maintain their market position. Anti-steering practices prevent insurers from directing patients toward more affordable providers. Meanwhile, all-or-nothing contracts require insurers to either accept all associated hospitals or none at all.
However, the Council notes that the anticipated effects of banning these contracts can depend significantly on the structure of the healthcare market. They predict a reduction in premiums by 4% to 6% in areas where dominant hospital systems compete with insurers.
In response to the findings, White House press secretary Alison Schuster stated that the report reinforces the Trump Administration’s efforts in bringing meaningful cost savings to American healthcare users. She emphasized that by targeting anti-competitive practices, everyday Americans are experiencing lower premiums and increased take-home pay.
Furthermore, she noted that “leveraging free market competition” offers a viable solution to cost reductions without merely resorting to additional taxpayer funding.
The report’s release follows an announcement from the Department of Justice regarding a settlement proposal aimed at resolving a U.S. civil antitrust lawsuit against OhioHealth Corporation. This lawsuit challenges the company’s contract restrictions deemed anti-competitive.
Earlier in March, the DOJ, alongside the U.S. Attorney’s Office for the Southern District of New York, filed a lawsuit against New York-Presbyterian Hospital for allegedly enforcing contract restrictions that limited patients’ access to lower-cost healthcare options.
Experts had previously warned that the lack of competition in the healthcare landscape could be contributing to escalating costs, with the average health insurance premiums for employees reported at $9,325 for individual coverage and $26,993 for family coverage in 2025.
